Gold may go down to $1200/oz: PhilipCapital

In an interview to CNBC-TV18, Rajini Panicker, Head of Commodities - Research of PhillipCapital spoke about the outlook for the commodities market.

Below is a verbatim transcript of the interview:

Q: Do you expect to see more of a pullback in gold today?

A: Not really. What I have seen in gold is that it is now getting confined to USD 1,400-1,495 per ounce range. It has established this range after it breached USD 1,525-1,800 per ounce range that it had maintained for about 18-19 months.

After that we saw the sharp breach to about USD 1,322 per ounce early April, which was a two year low. Post which we are seeing USD 1,400-1,495 per ounce range, which only establishes that after the sideways trading that we saw for about 19-20 months, it has established a lower low. So, given that kind of a framework we are expecting gold to remain confined to this reach and perhaps see the further downside breach and a test of USD 1,322 per ounce, a breach of that could then see possibly gold go to about USD 1,200 per ounce.

Q: We have not seen crude being able to bounce back too much after the run we saw a few weeks back, how are you guys approaching crude, is it a short bias on that?

A: Yes, on crude, the Cushing stock for the West Texas Intermediate (WTI) declining which is what is supporting crude. Also, the positive US employment numbers and ideas that growth could be picking up in US, that Fed might now start pulling back on the stimulus that they have encouraged, signs that perhaps things are looking bright for US is supporting crude. So, we are looking at crude testing about USD 99-98 per barrel which is the crucial resistance. If we see a breach of that, we could see crude go to about USD 105-108 per barrel levels.